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Samson Oil & Gas Provide a Production Advisory

Posted on: Tuesday, 2 October 2007, 21:00 CDT

Samson Oil & Gas Limited:

LOOKOUT WASH FIELD

The Directors of Samson Oil & Gas Limited ("Samson") advise that the Operator of the Lookout Wash Field has shut in the field due to the low gas price that has been set for October, which was US$1.11 per MMBTU at Colorado Interstate Gas (CIG), the price point for this gas. The shut in will allow scheduled maintenance to be conducted in the field compression system, and it is expected that firmer prices in November will see the field back on production for the foreseeable future.

Samson will lose around US$30,000 in revenue as a result of this shut in, but will be compensated through the two fixed forward swaps that it has in place for this gas. These fix forward swaps are set at US$6.03 and US6.15 per MMBTU, respectively, and will yield US$250,000 this month. The Jonah Field remains in production for October and gas will be sold from that field priced at US$1.22 per MMBTU.

The expected production from these two fields and the respective hedges that are in place are set out in the following table and show that Samson's expected revenues from these two fields along with the hedge will amount to US$285,000 compared to a budgeted revenue from these fields for October of US$348,000 which is a drop of 18%.

Field

Price point

October price US$ per MMBTU

Budget Volume MMCF

Fixed Forward Swap Volume MMBTU

Fixed Forward Swap Price US$ per MMBTU

Fixed Forward Swap US$

Actual Revenue US$

Budget Revenue US$

Lookout Wash

CIG

$1.11

31.3

25,000

$6.03

$126,000

$126,000

$179,000

Jonah

OPAL

$1.22

29.6

25,000

$6.15

$123,000

$159,000

$169,000

Total

$249,000

$285,000

$348,000

The current weak gas prices that are being experienced in the Rockies are considerably lower compared to the balance of the USA. For instance, the Henry Hub price reported by Platt's for October was US$6.43 per MMBTU. The weaker prices in the region are due to the limited transmission facilities for delivery of Rocky Mountain gas to the more populous gas consuming regions of the U.S. This problem is expected to be substantially rectified by the completion of the construction of the Rocky Mountain Express (REX) gas pipeline. REX is being built progressively from the Rockies region to the eastern consuming regions of the USA. This pipeline is partially operating, bringing gas from the San Juan and Piceance Basins to the west and south of Wyoming to the head of the current completion point at Cheyenne in eastern Wyoming, thus establishing a surplus at that point, ahead of the completion of the REX-West segment which will see this pipeline completed into the area south of Chicago. This phase of the pipeline is scheduled for completion in January 2008 and should result in Rockies gas being traded at a much more modest discount to the Louisiana based Henry Hub gas.

DEVELOPMENT WELL 30-31

The Operator has advised that they expect that the Lookout Wash development well 30-31 should spud on about October 20. This well is located in the central and most productive part of the field and is adjacent to the two best performing wells in the field and therefore represents a very low risk investment opportunity. This well is expected to produce at an initial rate of about 1.5 mmcfpd, which will add a net 0.27 mmcfpd to Samson's production. Thus, with the removal of the gas surplus in eastern Wyoming and with the demand generated with the onset of the heating season this additional gas is expected to be sold at reasonable prices, and will more than offset the revenue lost during October.

Samson's shares (ASX: SSN) are not currently traded on United States securities markets. While Samson has filed a registration statement with the U.S. Securities and Exchange Commission on Form 20-F, Samson's shares will not begin trading in the United States until the American Stock Exchange approves the listing of Samson's American Depository Shares, each of which will represent 20 fully paid Ordinary Shares of Samson.

For and on behalf of the board of

SAMSON OIL & GAS LIMITED

TERRY BARR

Managing Director

Statements made in this release that are not historical facts may be forward looking statements, including but not limited to statements using words like "may,""believe,""expect,""anticipate,""should" or "will." Actual results may differ materially from those projected in any forward-looking statement. There are a number of important factors that could cause actual results to differ materially from those anticipated or estimated by any forward looking information. In particular, while Samson has been informed that the Rocky Mountain Express pipeline will be completed in early 2008, a number of factors outside of its control may delay this project or the development of other markets for the sale of Samson's gas. In addition, while Samson understands that the Operator of Lookout Wash field will drill the well according to the most recent advice, the results and the timing of this well may vary from current expectations since various factors, including but not limited to equipment availability or breakage or other unanticipated difficulties could delay those events and change those expectations.

Moreover, Samson does not have any control over gas prices, which can be influenced by a number of factors besides the local pipeline constraints discussed in this release. A description of the risks and uncertainties that are generally attendant to Samson and its industry, as well as other factors that could affect Samson's financial results, are included in the Company's registration statement and report to the Securities and Exchange Commission on Form 20-F, which is available at www.sec.gov/edgar/searchedgar/webusers.htm.

Source: Business Wire

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